Most of the issue there is with drivers to run your hardware. A crude definition of the Chrome OS is the Chrome browser with a Linux kernel stapled on it for driver support.
It will be interesting to see how Google handles the use of standalone software, but as it stands now, I think the basic concept is that so much of your computer use can be conducted on the Web, via The Cloud (tm) and such, use Google Docs or similar for productivity, GMail or Yahoo for mail, Lunapic or Phoenix for image editing, you get the idea.
Even if you can't run The Sims 3 on Chrome right away, the Master Plan (tm) of Google suddenly seems so clear in hindsight. Search engine, mail client, calendar, the ability to search your computer files, document editing, image hosting, blogging, chatting, videos, newsgroups, website building, 3d modeling, RIA application building, a web browser, mobile OS... suddenly you have nearly all the pieces you need to turn on your computer, load their browser, and do most of the stuff you need to do without ever even leaving their domain. It's almost like they were setting up from the start to do a web-based OS that would compete directly with Microsoft.
